The Swiss carrier is struggling with weaknesses in all its major operational segments. The Fixnet unit, which deals with access and telephony services to residential and business customers, reported a 7.9% fall in six-monthly revenue to CHF 2.533bn ($2.07bn).

Swisscom said the decline was mostly down to the sale of international wholesale business, and pointed to the fact that it had managed to reduce the average line loss to 16,000 lines. Growth in broadband access lines remained strong, with customer numbers rising by 32.2% during the first half to 1.25 million.

The Mobile division saw a 7% decline in sales to CHF 1.96bn ($1.6bn), as the carrier was hit by lower mobile termination rates, while ARPU levels declined in both its prepaid and post paid segments, despite customer numbers rising by 10.5% to 4.47 million. Switzerland has a population of 7.4 million people, and mobile penetration rates are very high at around 90% plus.

The Solutions unit provides fixed-line domestic and international voice telephony services to business customers, and sales fell 6.5% at CHF 587m ($480m). Swisscom blamed pricing pressures, with lower termination rates and competitive pricing pressures that were, it said, not getting any better.

Swisscom’s last remaining major unit is its Other segment, which comprises Swisscom IT Services, Broadcast, Antenna Hungaria, the Accarda Group and Swisscom Eurospot, its hotspot operator. Again sales fell at this division fell to CHF 638m ($522m).

However, Swisscom can take some comfort from the growth of Swisscom Europot, where revenue rose 92.3%, and Swisscom IT Services, which recorded a 36.7% rise in revenue for the six months to CHF 164m ($134m) from CHF 120m ($98m) a year earlier.

IT outsourcing and the acquisition of banking and IT specialist Comit AG in January this year contributed to the rise in sales at the Services unit, although it did post an EBITDA loss.

Swisscom is facing significant challenges as it struggles to grow in a saturated market. Most of its problems stem from its largest shareholder, the Swiss Government, which still holds a 62.45% stake in the carrier. According to CEO Schloter, a privatization of the carrier is now on hold after the Swiss Parliament rejected privatization proposals in June.

Schloter said politicians are concerned with three issues that need to be addressed before the carrier proceeds down the privatization route again. These issues are the eventual ownership of the carrier, the fear of a degradation of its universal service, and worries over part of the telecoms infrastructure that is used by both Swisscom and the Swiss military.

Last November the Swiss governmentat effectively torpedoed Swisscom’s planned acquisition of the Irish carrier Eircom Group Plc. It had also been in the frame to acquire the former Danish incumbent TDC AS, and had previously tried and failed to acquire neighboring carriers Telekom Austria AG and Cesky Telecom AS.

Swisscom is also facing a possible fine of CHF 489m ($400m) regarding high mobile termination fees. A final ruling of this is expected at the end of the year, but Swisscom admitted that it has not set aside provisions for the fine because it believes the fine was unlikely to be imposed.

The carrier also faces the prospect of allowing competitors into its exchanges to provide unbundling services, although this law is not likely to come into effect until January.

Looking forward, it said it now expects net earnings of CHF 3.7bn ($3.02bn) for the full year, down from an earlier estimate of approximately CHF 4bn ($3.27bn).

Following the results, Swisscom’s ADS shares on the New York Stock Exchange fell 1.97% to $32.90.